Tong contraction usually occurs in a relatively economic contraction, and the overall demand for society continues to be less than the total supply of society. In the process of shrinking, it is often accompanied by production decline, market atrophy, corporate profit margins, less productive investment, as well as rising unemployment rates, decline in income.
The example (this is purely an example): For example, the country's economic recession, people dare not spend money casually, countries that have no confidence, what kind of future will make huge unfortunate fear in the future, Don't worry about resting in the bank, not afraid of failure. Therefore, money is not the normal circulation of goods, because no one buys and accumulates, then the company will reduce the price to stimulate the purchase, so the money of the same face value can be appreciated than before buying more goods; To meet the demand of the market, thereby reducing the profit of layoffs or reducing wages, because people have lost their job or reduction of income and are unwilling to spend money. All in all, this is a vicious cycle. Without the macro -control of the country, the market itself is almost impossible to solve this problem.
The tightening of currency is manifested as a trend of general prices, sustainability, and long -term decline. The reasons for the formation of currency tightening are complicated. Generally, the overall supply of society exceeds the total social needs. It is the same as inflation, which will adversely affect development.
Tong contraction usually occurs in a relatively economic contraction, and the overall demand for society continues to be less than the total supply of society. In the process of shrinking, it is often accompanied by production decline, market atrophy, corporate profit margins, less productive investment, as well as rising unemployment rates, decline in income.
The example (this is purely an example): For example, the country's economic recession, people dare not spend money casually, countries that have no confidence, what kind of future will make huge unfortunate fear in the future, Don't worry about resting in the bank, not afraid of failure. Therefore, money is not the normal circulation of goods, because no one buys and accumulates, then the company will reduce the price to stimulate the purchase, so the money of the same face value can be appreciated than before buying more goods; To meet the demand of the market, thereby reducing the profit of layoffs or reducing wages, because people have lost their job or reduction of income and are unwilling to spend money. All in all, this is a vicious cycle. Without the macro -control of the country, the market itself is almost impossible to solve this problem.
Tightening
The tightening of currency is manifested as a trend of general prices, sustainability, and long -term decline. The reasons for the formation of currency tightening are complicated. Generally, the overall supply of society exceeds the total social needs. It is the same as inflation, which will adversely affect development.